South Korea’s entertainment powerhouses, HYBE, Kakao Entertainment, and SM Entertainment, are making aggressive moves to expand their global reach, with a particular focus on the lucrative North American market. Central to these strategies are the launch of new audition programs and the establishment of strategic partnerships with prominent North American record labels.
Scooter Braun Is Now The Sole CEO of HYBE America
HYBE recently announced a new global girl group audition program named The Debut: Dream Academy. From an overwhelming 120,000 global applicants, the program will spotlight 20 finalists, primarily through SNS platforms. This move comes after nearly two years of HYBE’s strategic planning for international market entry in collaboration with a North American record label. Having established HYBE America in April 2019, the company is expanding its North American presence through subsidiaries like Schoolboy Records, SB Project, and Big Machine Label Group.
Similarly, SM Entertainment and Kakao Entertainment are ramping up their global strategies. Since Kakao Entertainment’s acquisition of a majority stake in SM Entertainment in March, the two have been leveraging their combined strengths. Last August, they launched a joint corporation in North America, aiming to capitalize on SM Entertainment’s global IP and production capabilities, along with Kakao Entertainment’s vast music and album distribution network.
All eyes are on HYBE, Kakao, and SM
Jang Yoon-joong, the CEO of Kakao Entertainment America, stated, “Through the North American integrated corporation, we aim to accelerate the global expansion of SM artists and Kakao Entertainment in music, artist development, and IP planning, production, and distribution.”
K-POP INDUSTRY, THE TASKS AHEAD AS KAKAO TAKES SM
With significant investments at stake, all eyes are on HYBE and Kakao/SM. The two rivals may soon find themselves competing for acquisitions in the U.S. market and beyond, potentially inflating the selling prices of music companies. Analysts remain optimistic about their prospects, citing solid cash flows from their Korean acts. However, concerns arise as both HYBE and SM’s stocks trade at high multiples relative to earnings, making them vulnerable to market downturns. Their earnings often fall below estimates, further increasing their vulnerability. But with the music industry consistently showing strong earnings growth, investor cash for acquisitions will likely remain abundant for now.
These strategic moves by HYBE, Kakao Entertainment, and SM Entertainment indicate a significant shift in their vision. They aim not just to grow the K-pop market in Korea but also to establish a strong foothold in the U.S., the epicenter of the global pop music industry. As industry experts note the shift of the primary K-pop consumer base from Asia to North America, it will be intriguing to see how these entertainment giants’ strategies will further elevate K-pop’s global stature. – K-Pop News Writer
Featured Image: HYBE, Kakao, and SM are ramping up their global strategies. Sources: Korea JoongAng Daily, Pinterest, and Wikimedia Commons.
